HTC will invest $300 million in digital audio company Beats Electronics, a move to boost multimedia technology on its handsets and strengthen the company’s brand in the U.S.
The Taiwan-based phone makers will invest primarily in Beats’ audio processing technology, which will be built into future handsets and tablets. One HTC device shipping this year will integrate Beats audio, though the company did not specify which phone or by when.
The partnership is an exclusive to HTC for its phones, both companies said. Beats provides high-end audio technology for some of HP’s computers, but this is the company’s first partnership for mobile handsets.
HTC’s move to invest in a sound company will boost the multimedia capabilities of HTC handsets, especially as the company becomes increasingly known for robust Android phones that take advantage of smartphones’ ability to handle music and video.
HTC has rolled out several 4G and even 3D models to multiple carriers, garnering a reputation for media-friendly, powerful devices. With Beats headphones emerging as a top-tier player in higher performance consumer audio, the association will lend an edge to HTC’s devices.
“With the magic of mobile devices, it is easier than ever to discover and buy new music,” said Peter Chou, HTC chief executive, to AllThingsD on Wednesday. “However, without great sound experience it is a shame.”
Less tangibly, HTC’s partnership with Beats may also develop the phone maker as a brand in the U.S. Though the company has enjoyed skyrocketing revenue and has gained ground quickly against big name cell phone makers, it remains less prominent than companies like Apple, Samsung and Motorola. Apple especially has long enjoyed an association with music fans.
Beats, however, has enjoyed almost immediate visibility since its inception due to its deep connections with the music industry. The audio company was started by seminal rap producer and performer Dr. Dre, and Interscope Records chairman and producer Jimmy Iovine, who started the company as part of a mission to restore audio quality in the digital era.
Beats headphones, some of which actually optimize sound within the headsets themselves, have become a status symbol among music aficionados and youth audiences. Beats’ association with HTC should “help create an emotional connection to HTC’s brand,” according to Chou.
Starting off as a middle-tier phone maker, HTC has steadily boosted its profile in the global smartphone market and made attempts to differentiate itself from other Android phone makers — for instance, scooping up Dashwire to add cloud services and create a more distinctive Android experience.
Its association with Beats may not give it a definitive edge in a crowded market, but it will certainly boost the company’s technical specs in the future and may cause audiophiles and music fans to take a second look at the company’s phones.
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